NEW PHOTO TECH READY FOR '96 FLASH

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Advanced Photo System, the hottest new photo technology in years, will make great pictures a sure shot but the product won't be exposed until after the holidays.

Jointly developed by a consortium of industry leaders, APS is expected to boost the lackluster worldwide camera and film categories-with current estimated annual unit sales of 50 million and 2.8 billion, respectively-by 10% to 20% each in 1996.

Photo marketers, who collectively will spend at least $150 million on marketing support during the new technology's first year, will formally unveil APS at the Photo Marketing Association's annual convention in Las Vegas next February. It will be in stores by mid-April.

Marketers opted to wait until 1996 to give retailers enough time to retool displays and other promotional tools, and to avoid confusing holiday film shoppers since the complexities of APS will demand some consumer education.

It's not by accident that APS will be introduced after the all-important holiday season, said Don Franz, editor of Photofinishing News Letter, Bonita Springs, Fla. "They're a year late already-they've been cautious not to interfere now with 35mm film sales over the holidays."

Photo marketers will not reveal marketing plans until February, but James Chung, director of investor relations at Fuji Photofilm Co., said the marketer, which spent $6.5 million on measured media in 1994, according to Competitive Media Reporting, will double its efforts in 1996 through Angotti, Thomas, Hedge, New York, to educate consumers about the system.

"Marketing will increase dramatically," said Bill Smith, Eastman Kodak Co. manager of worldwide business planning and marketing, though he declined to be specific.

Kodak spent $65.4 million in the U.S. on its brand last year, primarily through J. Walter Thompson USA, which will handle APS.

Other marketers wouldn't comment. Canon spent $10.3 million on media in 1994 compared with $9 million for Nikon and $5.1 million for Minolta Co.

Significantly reducing common photography errors, APS cameras "speak" to APS film about lighting, composition and other data through magnetics, which the film communicates to APS photo finishing equipment. Prices on the new cameras are expected to be 15% to 20% higher than standard point-and-shoot products; APS cameras are likely to be slimmer due to the leaderless, drop-in film cassettes, which can be changed midroll. Single-use camera versions may also be available with limited features.

"The key word here is `foolproof,'*" said Harold Martin, editor of industry publication Wolfman Report, New York. "The system makes it almost impossible to have pictures that are poorly exposed, have poor color or are printed badly."

Created by Kodak, Fuji, Minolta, Canon and Nikon, APS will likely avoid the quality problems of Kodak's defunct disc camera and has a more universally accepted format. Polaroid Corp., Agfa, Konica, 3M and others have agreed to license the system as well though each is expected to have unique features on its APS product.

"This is the messiah and a salvation for photography," Mr. Chung said.

U.S. sales of film and point-and-shoot cameras in 1996 are expected to jump 10% to 20% from an estimated 14 million and 12 million units, respectively, according to manufacturers and industry observers. Kodak estimates total U.S. unit film sales rose about 5% for the past 12 months, while Mr. Franz said worldwide film sales for this year are up 9%.

Cannibalization of traditional film sales could reach 5% to 10%, Mr. Franz said.

But "you will continue to see strong sales in multiple formats," said Kodak's Andrew Salzman, worldwide marketing manager and VP-consumer imaging.

While APS is a technological leap, it is not part of the digital products that Kodak and others have been moving toward for professional photographers.

"This may be the last near-traditional photography system we see," said Robert Curran, an analyst at Merrill Lynch & Co., New York. As the disappointing introduction of Kodak's Photo CD storage system may suggest, he said that consumers still are not ready for filmless cameras and costs are still prohibitive.

"Digital may be where the technology is going but it's not where it is," Mr. Curran said. "It is not financially accessible yet, and a lot of people still can't program their VCRs."

Separately, Hallmark Cards recently dropped out of a retail joint venture with Kodak amid a review with Leo Burnett USA, Chicago, and Young & Rubicam, New York.

Kodak hired some Hallmark people from the project, a Kodak spokesman said, and intends to continue testing its gift-imaging technology, though the status of the agency review is uncertain.

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